Non-Marxian Socialism

FABIAN SOCIALISM

JOHN ATKINSON HOBSON (1858-1940)

 by Leyla Kocakaya, April 2002

 By the end of nineteenth century, major European powers such as Britain, France, Germany, Russia, Netherlands, Italy, and Belgium began to extend their rule to those parts of the globe whose inhabitants they saw as “uncivilized” and “backward.”  While they brought major portions of Asia and Africa under their rule, many political economists, as they were called at that time, tried to explain the reasons behind imperial expansion.  One of those who tried to develop a theoretical explanation for imperialism was John Atkinson Hobson.

Hobson, who was an English economist, was born in Derby in 1858.[1]   The economist lived through the era of this high British imperialism and believed that capitalism has created an unjust and inefficient society; therefore, he joined the Fabian Society in 1887.[2]  While he was working for a newspaper, Manchester Guardian, he became the newspaper’s correspondent in South Africa where he developed the idea that “imperialism was the direct result of expanding forces of modern capitalism.”[3]  Even though he wrote for socialist publications, such as the New Leader and the Socialist Review, he rejected theories of Karl Marx; i.e. rather than a communist revolution, he called for the reform of capitalism.

Hobson earned his popularity mostly because of his criticism of classical economics.  He argued that the economic theory ignored ethical problems of social welfare and that it needed to be reformed.  In his most important book which was first published in 1902, Imperialism: A Study, Hobson argued that imperialism was the direct result of capitalism.  His reasoning was as the following: Capitalistic forces within the empire over-saved by keeping the wages of the labor as small as possible or by simply employing as few labor as possible.  This resulted in under-consumption among the majority of the population.   These savings, furthermore, needed to be invested.  Capitalists found that they would get the highest returns if they invested in the underdeveloped areas.  That is when they started to invest in the underdeveloped areas of Africa and Asia.  The only way for them to protect their investments from the local populations was to get their government’s help.  They, therefore, used their influence in the government and caused the annexation of those areas where they have heavily invested.[4]

By 1905, however, Britain reached such a high industrial level that further expansion of the empire was not profitable anymore.[5]  Yet, even though it was not efficient and it did not yield high level of return for the empire, the system continued to exist.  Hobson argued that even though the economic drive behind imperialism was causing inefficiency, the system continued to strive because of non-economic reasons, such as pride, prestige and altruism, i.e. civilizing mission.  He argued that even though these non-economic factors were not the main reasons of imperialism, they were nevertheless important and necessary tools for the investors. [6]  Hence, the majority of the population supported the expansion of the empire for non-economic reasons even though they did not realize the benefits.

Even though Hobson’s arguments seems similar to those of Karl Marx’s, Hobson’s solution to the unequal distribution of income was different.  They both agreed on the fact that the growing power of industrial concentration and monopoly caused unequal distribution of income.  Unlike Marx, who predicted that this unequal distribution of wealth would be the cause of the system’s own destruction, Hobson refuted this prediction and advocated for a social reform.  This social reform would include the redistribution of wealth from the rich to the poor either directly or through government programs that would enhance public consumption.  In return, the increased consumption would increase demand and supply new opportunities for investment.[7]  As a result, Hobson claimed that “partial socialization” would bring supply and demand into equilibrium and that there would be no need for revolution.  The problems of unemployment and poverty would be also be remedied automatically, as the author claimed in his book “The Problems of Unemployment.”

Hobson’s attempt to synthesize capitalism with socialism, i.e. reforming capitalism in order to decrease unequal distribution of income and refuting the revolutionary prediction of Marxism caused him earn an infamous popularity among his colleagues.  “He received a much better reception from the trade union movement fighting for higher wages, and from those ‘socialists’ who wanted to use the state to achieve such redistributions of income and power.”  Additionally, even though Lenin was highly influenced by Hobson ideas, he rejected the author’s notion that social reform would lead to self-sufficient capitalist development.[8]

It is worth mentioning how important and realistic Hobson’s ideas were.  He was born to an imperialistic country, which was, furthermore, at the highest stage of its imperial era.  He was in South Africa as a newspaper correspondent when his country went to war with the Dutch settlers in Africa.  He also lived through the World War I and the “unpeaceful” peacetime.  He, therefore, was an eyewitness to the early imperial development of his countries.  He based his theories on facts and statistical data, as in his work “Imperialism.”  His observation of the unprofitability and the inefficiency of imperialism were not only evident, but also provided realistic basis for his theories.

The unequal distribution of income and the inefficiencies associated with capitalism is what he saw as the problem.  Like Marx, he viewed imperialism to be a result of capitalism because of which wars were fought so that finance capitalism would be preserved at the expense of the rest of the population.    Hence, the system ignored the ethical problems of social welfare and needed to be reformed. The fact that he was a product of his era and that he was creative in producing radical but pragmatic solution for what he saw as defective with the system aparts him from other economists of his time.

[1] http://www.spartacus.schoolnet.co.uk/TUhobson.htm

[2] http://www.spartacus.schoolnet.co.uk/Pfabian.htm

[3] http://www.spartacus.schoolnet.co.uk/TUhobson.htm

[4] http://www.janus.umd.edu/Feb2002/GoldsteinHobson/01.html

[5] Imperialism: A Study; p.31

[6] Imperialism: A Study; p. v

[7] http://www.eco.utexas.edu/faculty/Cleaver/368LecturenotesIII.html

[8] http://www.eco.utexas.edu/faculty/Cleaver/368LecturenotesIII.html

 

 

 

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